In a gun battle near Petach Tikvah last night, Haganah virtually wiped out an Arab robber band that had been molesting Jewish ##tlers, but lost one of its own members in the operation.In a "communique" issued to the press, the Haganah stated that "several Arab ?ber gangs recently appeared in the Sharon area, attacking and killing Jews. The ?ganah was compelled to find and root out these gangsters. Last night a Haganah it discovered the gangsters in an Arab cafe on the highway near Petach Tikvah and ##ve battle, killing seven of the gangsters, including their chief, and wounding several others. The Haganah was compelled to undertake this action in order to clear the ?cinity and make Jewish life safe, but the Haganah does not fight peaceful, law ##ding Arabs."

Troops which arrived this morning at the cafe, which is in the Arab village Taga, found four bombs planted by the Haganah. In the process of detonating them, ## soldiers partially wrecked the cafe. Afterwards, they cordoned off the nearby settlement of Givat Hashlosha and carried out searches, the results of which were not announced. The outskirts of Taga were reported to have been mined to prevent pursuit.

The dead Haganah member, Shlomo Miller, 23, died in Beilinson Hospital, in ##etach Tikvah this morning. Meanwhile, a Jewish watchman at Ramat Gan was attacked ## another Arab gang, suffering several stab wounds.

PALESTINE ARAB LEADER URGES ARABS TO ACQUIRE ARMS

Police last night shot and wounded a Jewish youth who was posting Sternist placards in Ramat Gan. While his wounds were being dressed in a Tel Aviv infirmary, a number of Sternists invaded the building and released the youth, who was later found dead.

The cost of the extremist campaign against the government and the various restrictions including curfews and martial law were detailed during a broadcast by Montague Brown, assistant economic secretary of the government. He reported that the security budget which amounted to $18,000,000 two years ago had risen to $32,000,000 for the current year.

Brown declared that losses resulting from curfews and martial control were incalculable and had retarded the country’s development. He also stated that as a result of the increased security budget decreases in taxes and import duties were impossible, although the latter eaxes were undoubtedly forcing up living costs.